A new report from the University of Phoenix Career Institute highlights that while many employers are moving toward skills-based hiring, there is a lack of consistent standards and tools for evaluating candidates’ skills. The report finds that 82% of hiring stakeholders say their organization is shifting to a more skills-based approach, but over half of employers report an absence of standardized practices, and 57% indicate they need better training to assess candidates’ abilities.
The shift comes as job applications have increased by 31% in the past year, according to Workday’s Global Workforce Report. This rise has been fueled by AI tools that make it easier for applicants to submit multiple applications quickly. However, with job openings remaining steady at the end of 2025, both employers and job seekers are facing increased competition and pressure on existing hiring systems.
The study reveals several challenges in current hiring practices:
– Twenty-two percent of hiring stakeholders believe poorly designed application systems may exclude qualified candidates. Fifty-eight percent of job seekers feel they are rejected despite having the necessary qualifications.
– Although most hiring stakeholders (75%) say personal connections should not influence hiring decisions, 79% admit referrals do play a role in final selections.
– Concerns about AI persist, with 57% of job seekers and 47% of hiring stakeholders believing these tools introduce bias into the process. Only 37% of companies audit their AI-driven hiring systems.
– A quarter of non-HR managers involved in interviewing receive no training before conducting interviews.
“Skills-based hiring can be a powerful driver of economic mobility and can help employers access overlooked talent—but only if intent and infrastructure are aligned,” said Alison Lands, VP of Employer Mobilization at Jobs for the Future. “That means measuring and hiring for what predicts success on the job, supported by clear standards and consistent evaluation.”
Cheryl Naumann, Chief Human Resources Officer at University of Phoenix, added: “Employers want to prioritize skills—but without consistent training, clear standards, or unbiased tools, the process risks becoming even more opaque. At University of Phoenix, we’re at the start of that journey as well, which is why we launched this report – to understand the landscape where progress is being made, where critical gaps remain, and what it will take to make skills-based hiring work in practice. There’s a real opportunity for business and education to align on the frameworks needed to make skills-first hiring a reality, and we’re committed to continuing this important dialogue while preparing our students with the skills to thrive in today’s talent market, including how to market their skills effectively.”
The report calls on C-suite leaders to redefine qualifications based on actual skill requirements; HR professionals to standardize evaluation tools; higher education institutions to incorporate practical experience into curricula; and job seekers to showcase both hard and soft skills when applying.
The full whitepaper is available online at https://www.phoenix.edu/career-institute.html.
The findings are based on an online survey conducted among 2,000 U.S. adults—1,000 recent or active job seekers aged 18+ and 1,000 full-time employed individuals involved in company hiring decisions aged 25+. Fieldwork took place June 2–13, 2025.
According to its official website, University of Phoenix works to address barriers faced by underserved communities through education initiatives across its physical campus in Phoenix as well as online programs nationwide. The university offers more than 100 career-focused programs tied to over 300 professions and holds accreditation from the Higher Learning Commission. Its mission includes equipping students with relevant workplace skills aimed at supporting career advancement and community leadership efforts .
